Despite Growing Economy, Insurance Largely Unknown in Kurdistan Region
|June 15, 2013||Filled under Iraq Daily News|
“I don’t really know what insurance means,” says Muhammad Sabir, 26, a car mechanic in Erbil’s industrial zone. “I have never had a customer bring in a car for repair on an insurance company account.”
ERBIL, Kurdistan Region – Despite a growing economy the insurance industry remains largely undeveloped and unknown in Iraq’s Kurdistan Region, with auto insurance the only kind in demand in the autonomous northern enclave.
Over the past several years a number of insurance companies have opened shop, but few people use their services or even know anything about them.
According to the owner of an insurance company, car insurance is the only one in demand so far among the Kurdish population.
Muhammad Mahdi, the owner of a car dealership in Erbil, says that purchasing insurance for the vehicles on his lot has given him peace of mind.
“I am not worried at all, even if my cars get stolen or catch fire,” Mahdi told Rudaw. “I have insured all of them and I will be compensated for anything that may happen to them.”
Mahdi says that people still do not understand the value of insurance.
Until the early 1980s many insurance companies existed across Iraq. But they all closed down during the devastating 1980-88 war with Iran, and Iraq’s subsequent invasion of Kuwait which triggered two decades of international sanctions and economic hardship.
“I don’t really know what insurance means,” says Muhammad Sabir, 26, a car mechanic in Erbil’s industrial zone. “I have never had a customer bring in a car for repair on an insurance company account,” he adds.
However long it may take for people of the Kurdistan Region to become familiar with the idea, the region’s booming economy may sooner or later make insurance a necessity.
“Because of its good economy and oil industry, a huge number of investment companies have come here,” says Haitham Abulaynayn, director general of an insurance company in Erbil. “This makes the need for insurance companies ever greater.”
He adds that because most residents are strangers to the idea, the Kurdistan Regional Government (KRG) should step in and make certain types of insurance mandatory, as in most developed countries.
The government seems to have already taken the first step in this direction, by allowing local and foreign insurance companies to work in the Kurdistan Region. According to a finance ministry decree, all insurance companies are free to work and advertise their services as long as they abide by the region’s laws.
It is possible that some people may have religious reasons for avoiding insurance companies.
“Dealing with insurance companies is prohibited (haram) and Islam considers it the same as gambling,” Ali Faqe, a cleric and member of Kurdistan’s Fatwa Commission, told Rudaw. “You give away all that money and may never get it back.”
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